In a significant development aimed at restoring growth and infrastructure progress in the planned capital city, the Andhra Pradesh Government has extended a Government Guarantee and Letter of Comfort to the AP Capital Region Development Authority (APCRDA) to secure a ₹7,500 crore loan from the National Bank for Financing Infrastructure and Development (NaBFID). The approval was issued through an official Government Order on Friday.
Strategic Funding Support to Resume Capital City Construction
The financial infusion is expected to fast-track multiple stalled infrastructure works in Amaravati, which has awaited institutional investment and structured financial backing for large-scale capital development. With this credit guarantee in place, the APCRDA will be able to mobilize immediate resources to advance city-building initiatives, urban planning projects, residential layouts, and public infrastructure.
S Suresh Kumar, Principal Secretary of Municipal Administration and Urban Development, stated that the Government examined the proposal carefully before extending the guarantee, which is applicable throughout the entire tenure of the loan and covers both principal and interest components.
Financial Discipline and Conditional Borrowing
According to the Government Order, the guarantee will be invoked only if APCRDA defaults on payment obligations. The terms require APCRDA to service the loan from its internal revenue sources, ensuring financial accountability and structured debt management. The authority will pay a 2% guarantee commission for the support extended by the state.
This approach positions the loan as a financially responsible instrument rather than a burden on state finances, enabling capital development without immediate fiscal pressure.
A Major Step for Restoring Confidence in Amaravati
The approval of this funding support is viewed as critical in shaping investor confidence and administrative commitment toward constructing the greenfield capital city. Amaravati has faced delays and uncertainty, and the availability of institutional financing may mark a turning point for planned projects.
Stakeholders believe that the move signals stability, policy direction, and renewed focus on capital region development key components required for long-term economic positioning and regional growth.
Looking Ahead: Infrastructure Push to Transform Amaravati
The release of funds through NaBFID is expected to be directed toward major city infrastructure, including government complexes, roads, bridges, utilities, public services, and housing layouts. With structured capital deployment and continuous monitoring, Amaravati’s progress could accelerate over the coming months.
The decision underscores the Government’s commitment to building a modern administrative capital and restoring momentum to a project of national significance.
